A Glimpse into the Taiwan Semiconductor Equipment and Materials Market

A Glimpse into the Taiwan Semiconductor Equipment and Materials Market

By Dan Tracy, senior director and Edwin Hall, senior business development manager

SEMI Industry Research & Statistics, September 4, 2007

Over the years, companies in Taiwan have emerged as global leaders in the semiconductor industry. Taiwan is home to the top semiconductor foundries Taiwan Semiconductor manufacturing Corporation (TSMC) and United Microelectronics (UMC); leading memory makers Inotera Memories, Nanya Technologies, Powerchip Semiconductor, and ProMos Technologies; and packaging subcontractors Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL). These companies have significantly helped Taiwan excel in this important industry. Given its leadership position and on-going investments, strong growth is expected in both the semiconductor equipment and materials markets in Taiwan over the next several years.

Global revenues for new semiconductor equipment in 2006 exceeded the $40 billion mark, which makes it one of the best years for the equipment market. 2007 will look to be a bit different compared to last year. The latest SEMI Consensus Forecast shows that the equipment market is expected to grow just 1 percent in 2007.

The good news in this forecast is the anticipated growth in spending for Taiwan. For the Taiwan market, total equipment billings through May have reached $3.8 billion, or 47 percent above billings for the same period in 2006, and total equipment spending is forecasted to reach $8.8 billion. Equipment spending in Taiwan is expected to hit $9.5 billion in 2008.

The key driver in equipment spending growth in Taiwan is the on-going investments in 300 mm fab capacity. Taiwan is currently home to 13 300 mm production lines, with another seven lines expected to be in production by the end of 2008. Taiwan’s share of the installed 300 mm fab manufacturing base will remain the highest of all the key manufacturing regions in the semiconductor industry.

The global semiconductor materials market, which consists of wafer fabrication materials and packaging materials, is forecasted to grow about 10 percent from about $41.3 billion (2007) to $45.3 billion (2008), which will make it the fourth consecutive record breaking year. This is driven by the overall growing demand for semiconductor devices as well as consumption of advanced materials to fabricate and package leading edge devices. Growth for the semiconductor materials market is predicted to continue to grow for at least the next two years.

Taiwan and the other Asian countries are helping to drive the semiconductor materials market into new levels. Taiwan has enjoyed consistent growth in the last two years and is expected to continue this trend. It is forecasted that the materials market for Taiwan will grow from $7.8 billion (this year) to close to $8.6 billion (in 2008)—an increase of about 10 percent.

The Taiwan semiconductor equipment and materials market will continue to grow and prosper as it continues to invest and compete in this vital industry. Growth will continue in this region as new innovative products are being developed and as demand for consumer electronics increases.